Offshore

M

MikyMouse

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Hi All,

I have some questions about offshore investment and savings.

First off what is the easiest and safest way of converting rand into a foreign currency bank account. I know that FNB and some of the other SA banks have Forex savings accounts, where you can hold USD etc but these seem very costly and limited in what you can do. I know on the FNB option you have to convert your USD to ZAR before you can transact, also to qualify for this product you need to be a FNB customer (which I am not). Is there a legitimate way to open a foreign bank account of sorts? What are the other options?

Secondly, with reference to offshore investment - I heard an ad on one of the podcasts that I listen to for a US index tracking investment company called "Betterment". In their FAQ they explain that only US citizens / residents can sign up for an account. Are there other affordable services like this that are accessible to us South Africans? So basically an international EasyEquities option of sorts?

Many thanks!!
 
There was talks about EE opening up for international trading, wonder if that will actually happen.
 
When I invest with Allan Gray offshore, I use a company called Incompass. They are suggested by AG. Basically, they open an Investec account in your name, you deposit the money (ZAR) into the account and then when you are ready to make the transfer, you contact them and they give you a rate and you say yes/no, depending on your feelings on the rate and movements.

They then transfer to whatever account and currency you nominate.

The really nice thing is that you can leave cash in this Investec account and withdraw at 24 hours notice and the rate is far better than the current retail banks offer. At the moment I'm getting 7.6%.
 
MikyMouse said:
First off what is the easiest and safest way of converting rand into a foreign currency bank account. I know that FNB and some of the other SA banks have Forex savings accounts, where you can hold USD etc but these seem very costly and limited in what you can do.

Many thanks!!
Click to expand...

If you hold an FNB bank account, you can open a Global Account online via online banking and choose the currency of your choice. Transferring Rands from your Cheque account to your Global account (into $ or what ever other currency) costs R60 per transaction.

Not really expensive if you buy dollars in bulk, and as long as you dont try to exchange back and forth every day. I have yet to find something as convenient and cheap as this.
 
Diplos said:
When I invest with Allan Gray offshore, I use a company called Incompass. They are suggested by AG. Basically, they open an Investec account in your name, you deposit the money (ZAR) into the account and then when you are ready to make the transfer, you contact them and they give you a rate and you say yes/no, depending on your feelings on the rate and movements.

They then transfer to whatever account and currency you nominate.

The really nice thing is that you can leave cash in this Investec account and withdraw at 24 hours notice and the rate is far better than the current retail banks offer. At the moment I'm getting 7.6%.
Click to expand...

Thanks!
These guys? http://www.incompass.co.za
 
Tman* said:
If you hold an FNB bank account, you can open a Global Account online via online banking and choose the currency of your choice. Transferring Rands from your Cheque account to your Global account (into $ or what ever other currency) costs R60 per transaction.

Not really expensive if you buy dollars in bulk, and as long as you dont try to exchange back and forth every day. I have yet to find something as convenient and cheap as this.
Click to expand...


I'm not an FNB client so unfortunately can't do this ...
 
Diplos said:
When I invest with Allan Gray offshore, I use a company called Incompass. They are suggested by AG. Basically, they open an Investec account in your name, you deposit the money (ZAR) into the account and then when you are ready to make the transfer, you contact them and they give you a rate and you say yes/no, depending on your feelings on the rate and movements.

They then transfer to whatever account and currency you nominate.

The really nice thing is that you can leave cash in this Investec account and withdraw at 24 hours notice and the rate is far better than the current retail banks offer. At the moment I'm getting 7.6%.
Click to expand...

I stand to be corrected but I think that some of AG's offshore funds are over subscribed and therefore no longer open to new investors.
 
marlin178 said:
You can also invest in a tracker ETF fund like I have.

https://www.dbxonline.co.za/Default.aspx?IsGuest=0 or http://www.etfsa.co.za/

I'm currently invested in the world the dbX trackers MCSI World Index ETF. Many experts believe that tracker funds will always outperform asset managers in the long term.

That's my 2C
Click to expand...


The question is what happens to these investments if EE goes down? I am very interested in ETFs but was wanting to know how to access offshore ones (ie USA's list of etfs)
 
MikyMouse said:
The question is what happens to these investments if EE goes down? I am very interested in ETFs but was wanting to know how to access offshore ones (ie USA's list of etfs)
Click to expand...
Nothing, you own them. They can be transfered to another platform.
 
How much are you looking to move? The problem with moving money offshore is the horrible interest rate you're going to get. Something like 1%
 
MikyMouse said:
Only small amounts at a time for now. Probably up to R1k
Click to expand...
Not worth it unless you need to spend it offshore. IMO, rather save those R1k payments every month and transfer lump sums.

If your trying to hedge against the falling Rand there are better ways to do it.
 
MikyMouse said:
Hi All,

I have some questions about offshore investment and savings.

First off what is the easiest and safest way of converting rand into a foreign currency bank account. I know that FNB and some of the other SA banks have Forex savings accounts, where you can hold USD etc but these seem very costly and limited in what you can do. I know on the FNB option you have to convert your USD to ZAR before you can transact, also to qualify for this product you need to be a FNB customer (which I am not). Is there a legitimate way to open a foreign bank account of sorts? What are the other options?

Secondly, with reference to offshore investment - I heard an ad on one of the podcasts that I listen to for a US index tracking investment company called "Betterment". In their FAQ they explain that only US citizens / residents can sign up for an account. Are there other affordable services like this that are accessible to us South Africans? So basically an international EasyEquities option of sorts?

Many thanks!!
Click to expand...

Do you want to buy physical Dollars?

Capitec can do that, I moved from Bidvest for that reason.

Do you have a specific reason or to you just want to be prepared?

Why not, buy DBxWD/US and some JSE:CFR, might be something worth looking into.
 
MikyMouse said:
Hi All,



Secondly, with reference to offshore investment - I heard an ad on one of the podcasts that I listen to for a US index tracking investment company called "Betterment". In their FAQ they explain that only US citizens / residents can sign up for an account. Are there other affordable services like this that are accessible to us South Africans? So basically an international EasyEquities option of sorts?

Many thanks!!
Click to expand...

Yes, Sanlam I trade will give you access to global markets:

2016-05-17_11-54-09.jpg
 
My only concern with the local DVXUS/EU is that even if international markets do not grow but the Rand dives you will realize capital growth in Rands and will be liable for capital gains. Even though the underlying stocks had not increased in Dollar terms.
 
MikyMouse said:
any recommendations?
Click to expand...

NEWUSD is an ETN you can use. Basically converts to USD and tracks the exchange rate. Same effect as storing it in a global account except when you withdraw you'll be subject to tax and it will be in Rands (which you can then transfer). Still way cheaper than using a global account. Do take not that this is an ETN from ABSA/Barclays though which means in the unlikely event of them going bust you could lose it all.

All depends on your timeline and goal, but if you have 5+ years and you want your money to grow "offshore" I'd shove it into DBXWD.

Personally I'd have the money ready in my trading/invest account, wait till 3 June to see what happens with the ratings downgrade and then decide what to do.
 
Thor187 said:
Do you want to buy physical Dollars?
Click to expand...
Not so interested in physical dollars - Isn't it illegal to hold these, because of the exchange control laws?


Thor187 said:
Capitec can do that, I moved from Bidvest for that reason.
Click to expand...
Are you referring to a foreign currency account?

Thor187 said:
Do you have a specific reason or to you just want to be prepared?
Click to expand...
A few reasons, 1) being prepared 2) the odd overseas purchase 3) travel 4) I plan on emigrating and would rather protect some money from the rand's depreciation
 
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